Good afternoon, ladies and gentlemen, and welcome to Plano&Plano Fourth Quarter 2025 earnings conference call. This video conference is being recorded and can be replayed at the company's IR website. The slide deck will also be made available to be downloaded. We'd like to inform you that all participants will be in a listen-only mode during the presentation, and later, we will hold a question and answer session, and further instructions will be provided. Before proceeding, we'd like to mention that statements that may be made during this conference about the business prospects, forecasts, and operating and financial targets are beliefs and assumptions of the management of the company, as well as information currently available to Plano&Plano.
Forward-looking statements are no guarantee of performance as they involve risks, uncertainties and assumptions, and as they refer to future events and therefore depend on circumstances that may or may not come to pass. Investors and analysts should understand that the macroeconomic environment, the sector, and other factors may impact future results of Plano&Plano and cause them to be materially different from those contained in the forward-looking statements. With us today, we have Rodrigo Luna, Rodrigo Luna, and Anselmo Soares, our CEO, our vice president, our CFO, and IRO. I'd now like to turn the floor to Mr. Rodrigo Luna, our vice president. He will start the presentation.
Thank you very much for joining, and good afternoon, everyone. Welcome to our earnings video conference call for the fourth quarter, 2024. 2024 was another challenging year for the company, but we have made good headway.
We have had solid performance, and we have achieved a lot. Focusing on sustainable growth and on mitigating risks, we have invested in processes, technology, and in manpower, responding to the demands of a company that grows resiliently and that prepares for the future that we plan. Based on robust figures, we'd like to highlight some historical records that bear witness to our acceleration and growth in the past years. In operations, in the private market segment, we had one of our main highlights in 2024 with BRL 3.3 billion in the year. That is now BRL 151 million higher or 40% higher YoY. In the fourth quarter, there was even more growth. It was 121% higher YoY. We had BRL 1.3 billion.
Net sales, 100%, also reached new records totaling BRL 3.4 billion, whereas the percentage Plano&Plano totaled BRL 3.2 billion in the year. Our financial results were also remarkable, setting new records. Net revenue grew BRL 517 million YoY. It was BRL 2.6 billion, 25% higher YoY. The net income also broke a record. It was BRL 244 million, a 28% increase YoY. There are challenges posed by inflation, so we would like to highlight our strict cost management for construction works. Our internal inflation was lower than INCC, which bears witness to the excellence of our engineering and our very efficient management of material and labor costs.
When we look at our social segments and our different segments in segment one, that was a key point, restating our efficiency in our operations in lower income segments in the Minha Casa, Minha Vida program. This is for families that have an income of up to BRL 2,600 a month. Few companies in Brazil can operate in the urban segment one in a profitable way with high quality products. This is a large segment with a lot of demand and with very low supply. We also increased our Pode Entrar program, totaling BRL 1.1 billion after the BRL 364 million in PSV that we had in September 2024. That's the highest volume considering all companies that are part of the program.
All of this progress bears witness to our commitment to having affordable housing for an ever greater number of families, increasing our social impact and restating our responsibility to meet the housing demands from the population. As for our capital structure, we have strengthened our financial position with a CRI, a CRI bond, at BRL 373 million. That goes up to 2028, 2029, coupled with the excellent corporate rating we have, brAA+ by S&P Global Ratings. As for dividend payouts, we have reached an important milestone. We've had the highest payout ever, BRL 200 million. This is a payout ratio of 58.2% and a dividend yield of 11%. This payout was made available thanks to our solid cash management. It was BRL 148 million in 2024.
Also by our net cash position at the end of the year, as we also have no net debt and with the expectation of cash generation in 2025. We restate our commitment to ESG in creating our Instituto Plano&Plano, or Plano&Plano Institute. That is an achievement for the company. The institute will now formalize and coordinate the social activities that a company has already been performing in the past years. We'd also like to highlight that we have obtained the LEED Gold certificate for our corporate office, which also bears witness to our devotion and excellence in sustainability. We'd also like to highlight our commitment to our customer satisfaction. Since July 2024, the company has had an RA1000 rating.
That is the highest rating in Reclame Aqui, and the highest rating amongst the companies in the segment, including the low income ones, the ones that focus on the low income segment. This is a very important progress that we have made. It really shows that we provide high quality service and that we're ready to address any issues presented by our customers. Our land bank, 100% Plano&Plano, has a potential sale for sales of BRL 28 billion. That is the highest in our history, and it also shows signs that we have an even more promising future ahead of us. We're always focused on generating value in the long run, and we're very excited about our perspectives for 2025, very enthusiastic about them. I'd now like to turn the floor over to João Hoppe.
He will be presenting the operating and financial results for the period. Thank you very much. Good afternoon, everyone. Thank you, Luna. In the fourth quarter, 2024, the company launched seven new projects totaling BRL 1.262 billion. In 2024, considering the launches in Pode Entrar, which are non-recurring and that had a substantial weight in 2023, the company recorded BRL 3.9 billion in launches, a substantial increase of BRL 524 million. That accounts for a 15.7% increase YoY. Including Pode Entrar, which was greater in 2023, we see growth in comparison to 2023. We were higher in 2024.
In the Fourth Quarter, 2024, we had a 121% rise in Plano&Plano PSV private market at having BRL 704 million up YoY. In the whole of 2024, the company recorded a substantial increase of BRL 951 million. That is a 40% increase YoY, and it totals BRL 3.331 billion. In the latest quarters, the company has had sustainable growth in launches. Considering the total launches in the last 12 months, including the private market as well as Pode Entrar, ever since December 2022, the company has grown 46.4% at a compound annual growth rate. Our net sales continued to grow year after year.
Total sales 2024 were BRL 3.4 billion, a BRL 207 million increase when we compare it to the BRL 3.07 billion that we had in 2023. In the Fourth Quarter 2023, as well in the third quarter 2024, we have new Pode Entrar contracts at BRL 692 million and BRL 374 million respectively. These are non-recurring growth contracts, and they may distort the quarterly comparison. We'll now look at sales only for the private market. In 2024, the private market performed really well. We had BRL 3 billion. That is a 26.2% YoY, a BRL 625 million increase. As for the fourth quarter of 2024, there was a 15% increase. That is BRL 92 million higher YoY.
That is the same base for comparison considering the holidays at the end of the year. When we look at the last 12 months in sales, we see constant growth in the company. Considering total sales, including Pode Entrar as well as the private market, ever since December 2022, the company has grown with a CAGR of 41.4% a year. That is a remarkable performance that really bears witness to our strong market or strong position in the market in the city of São Paulo, especially in the low income segment. We ended the fourth quarter 2024 with an inventory for sales that is equal to 0.98 years in sales.
In December 2024, the inventory over sales had an increase boosted by the almost BRL 1 billion that we had in PSV in December, and that was also accelerated at the start of the year after the end of year holidays. When we compare the first quarter 2021 with the fourth quarter 2024, we see a drop of 0.76 years in this indicator. We'd like to remind you that the inventory is composed 100% by units that are under construction. The company delivers most of its projects with all units sold. That restates our commitment to create a virtuous cycle where the commercial team focuses more and more on the products being launched, increasing our VSO and improving our performance in cash. Plano&Plano has grown year after year in its financial results.
At the end of 2024, we had an increase of BRL 517 million, getting to BRL 2.6 billion, which is a comparison to BRL 2.07 billion we had in 2023. Ever since 2020, net revenue has had an increase of 187%, which is an increase of over BRL 1.6 billion in four years. As for Pode Entrar, the company recorded a revenue of BRL 129 million in the fourth quarter, totaling BRL 244 million in the whole of 2024. As for our revenue, it's worth mentioning our positive impact in consistent growth in launches.
As we see the sales and the construction works make progress, the company recognizes that the revenue in the course of time shows a slowdown in comparison to the accounting practices in the real estate market. At the end of 2024, we had BRL 2.3 billion in payables. This performance reflects a growth of 54% in our REF. With these revenues, we are confident that we'll continue to increase our operations and that we'll see this improvement reflected in our financial numbers as well. At the end of the third quarter, the REF margin for the market was 38.3%. The company has maintained its REF margin at healthy levels with minor fluctuation.
We'd like to highlight the company's strong performance in segment one in the urban segment, which is for low income customers with an income of up to BRL 2,600 a month. The segment one product or products have the same gross margin or have a gross margin that's slightly lower than segments two and three. In 2024, our adjusted gross income was BRL 184 million, with a rise of BRL 139 million YoY. The gross margin in the private market, excluding Pode Entrar , was 35%. When we look at the adjusted gross margin, 100% Plano&Plano, we had an increase of 33.7% in the third quarter, or going from 33.7% in the third quarter to 33.9% in the fourth quarter 2024.
In spite of the substantial growth, the company has kept all of the expenses under control. When we look at the commercial expenses, we can see an improvement when we compare it to the previous year. We had a 2.1 percentage points decrease, going from 10.7% in the of the net revenue in the fourth quarter 2023 to 8.6% of the revenue or net revenue in the fourth quarter 2024. In the year, we go from 1.9 percentage points, going from 11.4% in 2023 to 9.5% in 2024. G&A accounted for 5.9% of the net income, or net revenue rather, in the year of 2024. In the Fourth Quarter 2024, this increase was 0.9 percentage points.
The nominal increase of G&A expenses in the past quarters shows the strategic investment we have had in expanding our internal structures, which is absolutely key to meet the rise we have had in our operations, which has amounted to BRL 4 billion in the past twelve months. These movements help the company prepare to support the continuous growth and maximize the future profitability. When we compare the last twelve months of 2023 and 2024, we see substantial improvements in the net margin, and we compare the whole of the year in 2023 and 2024, we see an improvement. The net margin went to 13.3% with a 0.3 percentage points increase YoY. The net income grew from BRL 269 million - BRL 244 million comparing 2023 - 2024.
That's a BRL 75 million increase. In 2024, the company had an adjusted EBITDA of BRL 147 million, a BRL 76 million increase YoY. The EBITDA margin was 17.3% with a minor reduction of 0.6% YoY. In the fourth quarter 2024, the Adjusted EBITDA was BRL 110 million with a 16.4% margin. The company ended 2024 with a positive operating cash generation totaling BRL 248 million, BRL 81.4 million in the fourth quarter. The company has not brought any receivables forward. These results really show the company's sustainable position in the market. At the end of 2024, the company's total debt was BRL 617 million and the cash and cash equivalents were BRL 802 million.
With that, the company had a net cash of BRL 186 million in 2024, and the net debt over equity ratio was -20.3%. In February 2025, the company had a record BRL 200 million dividend payout. The payout ratio was 58.2% with a dividend yield of 11%. This performance bears witness to the company's commitment to distribute the exceeding cash that will not be used in the operations. With the increase of the VSO, the company now enters a virtuous cycle with the advances made in construction works and generating operating cash. This scenario allowed for the payout ratio to be increased, and we were able to generate the best results for the shareholders. This is the end of our presentation, and we'll now open or start the Q&A. Thank you.
We'll now start the Q&A for investors and analysts. Should you wish to ask any questions, please click the button Raise Hand. If your question has been answered, you can just lower your hand. The first question comes from Ruan Argenton from XP. Please, Mr. Argenton, you may start.
We have two points to discuss here. The first is growth. It was quite remarkable what you have had in 2024. What do you expect for 2025? Do you believe a similar rhythm or pace will be kept? If you were to break it down into different segments, you have been very active in the in segment one, right? But I'd like to understand what your expectations are if you think that demand will continue to be high. Well, the second question is around Minha Casa, Minha Vida.
We have heard a lot about this subject lately, especially concerning the income ranges and if they would be reviewed. Considering that you have a very strong presence in segment one, would that impact you?
Thank you for your questions, Ruan. Our company is really well-structured, and it meets the needs of the market. We also have a very strong land bank to meet the demand. We feel very optimistic that 2025 will also be a year where we'll grow. We always follow our assumptions of having a good capital structure with structured results and always mitigating risks. Our plans for 2025 are quite robust and in line with what we have had in the past years. We're likely to have our earnings call in 2026 presenting new records as well.
The Minha Casa, Minha Vida program is a very successful one. We all know that. The federal government recognizes how important it is to help our country develop socially and economically. The current government is the creator of this, which is basically the biggest project of its sort in the history of the country. This government is, of course, then very concerned about keeping the program healthy. The inflation rate and the period requested reviews of the program so that the buyers can continue to have the access to the real estate. From time to time, the program will be adapted following the income and the price. This is being discussed with the government, with the pension fund or the. We're likely to have reviews for the program soon. There's no date yet for that.
That depends on a number of points, but we expect that to happen sooner or later. Thank you, Ruan.
Thank you, Luna.
Mariangela Castro from Itaú, you may ask your question, ma'am.
Thank you for taking my question. Thank you for the call. What are your views on inflation? How does that impact costs and INCC? How does it compare to INCC? And what do you expect when it comes to margins? How much of an impact can we expect?
Mariangela, INCC was at 6.5% last year, and our internal inflation was approximately 4.37% in 2024. Our expectation is that inflation should be about 5.5% for the ICPT Plano&Plano. We're attentive, but we will be working to deliver these 5.5% inflation rates.
We have now hired hydraulic and electric manpower for the work, so it's no longer outsourced, and also for the façade of Plano&Plano has a number of long-standing partnerships, and we hold hands with our vendors when there is a challenging moment, and we weather the crisis. Again, our expectation is a 5.5% internal inflation. That is our objective.
Pedro Lobato from Bradesco BBI.
Good afternoon, everyone. Thank you for taking my question. I've actually got two. First, cash and dividends. The construction works are basically covering two seasons now. What do you expect cash generation to be like this year? Do you believe there is a chance that the payout may increase in 2025? My second question also piggybacks on the gross margin point. ICPP has been controlled below INCC.
Why do we have this minor drop in the REF margins in the private market?
Thank you for your question. Let's start off with cash generation and dividends. 2024 and the base for 2025 is that we should have long-term corporate debt. We ended 2024 with net cash, and it had BRL 248 million in cash generation in 2024. With higher VSO, especially in the urban or urban segment one, when construction starts, we have almost all of the units sold already, so that puts us in a very comfortable cash cycle position. We expect to end 2025 with a positive cash cycle with net cash at the end of 2025 and without short-term debt. With operating cash generation, we hope to keep the payout ratio over 50%.
We had 58% this year, and the reference year was 2023, 37%, and we had at least 25% in 2021 and 2022. With the base scenario being repeated in 2025, it should repeat in 2026 as well. Our expectation is to keep our payout ratio at about or slightly higher than 50%. Of course, we'll only have that clarity at the end of the year. As for the REF margin, well, a good sales performance has an impact on the urban segment one. We launched 40% or we had 40% of our launches in the urban segment one, and we reduced the price of sales, so there is a lower level of taxing or fewer taxes, but we have less commercial expenses, so it's.
We have the commercial expenses showing after the gross margin. It's almost like the same effect of Pode Entrar. The gross margin is lower in segment one than in two and three. That's why when we sell a lot in segment one, the REF margin fuels some of this pressure. This should answer your question.
Thank you. Have a good weekend.
Thank you.
Ana- Julia from UBS will ask the next question.
We've got two questions on our side, actually. Good afternoon, everyone. The first question is around Pode Entrar. Anything new in the program considering the amount as well as the timeline? What is the company's position around this new phase? HIS and HMP, has there been any change in HIS?
Can you talk a little bit about how much they account for in the company, so what the breakdown is?
Hello, Ana. This is Rodrigo Luna. As for the next tranche for Pode Entrar, there's nothing new yet. The municipality of São Paulo has been managing the first two tranches of the program. This is a project that is known to be very successful, and then we'll have the third tranche. It's part of the municipality's objective to fight the housing problem. Also because of the HIS discussion, how we can help address all of these discussions. Our expectation is that sooner or later we should have this Plano&Plano has the ability or has a high building capacity and has a good footprint.
Plano&Plano will always be a good player if there is a request or an RFP and a healthy program. We're attentive. We'll certainly have this third tranche. It's hard to say exactly when, but if it meets our legal standards and our compliance standards, we will certainly be interested in joining. As for the social housing, this is a segment that we have been operating in since the start of Minha Casa, Minha Vida very consistently, following the rules and following all of the infrastructure laws. Over 97% of our sales are within the Minha Casa, Minha Vida program. The municipality has been auditing this program as well.
What we can say Plano&Plano is very interested in having this program very sustainably meeting what is so important to the Brazilian society, which is good quality, decent housing for low income people. We know how important this is for our country to be able to develop socially. This is what we support, and it helps develop the Minha Casa, Minha Vida program and the social interest housing program in São Paulo.
Matheus Meloni from Santander. You may ask your question, sir.
Good morning, or rather good afternoon, everyone. Thank you for taking my questions. I'd like to ask you if there is any update on the Barueri project, if you've got any news on it. This is a more middle-income project, right?
We've seen rates going up, so I don't know if this is a concern to you. I wanted to understand a little bit around your expectations. Thank you.
Thank you for your question, Matheus. The project is about to be approved by the Barueri municipal government. We have been working to promote the project for our real estate agents and for our salespeople. As soon as we have the approval from the authorities, we will launch it. This is a beautiful project. It's a project in a region where there are very few products that would compete with ours. All of the market studies that we have conducted show that this will really meet the need of the region.
As soon as the documentation is ready, we will launch the project because technically speaking, it is ready, and we're very optimistic. Of course, there is some tension and necessarily a concern around how this product will be absorbed. Whatever test we make takes the interest rates and the customer's possibilities into account. Right now there are very few products like this in that region, so it's a very low supply for a good demand. We believe that it's in line with what we've planned.
Rafael Rehder from Safra will ask the next question.
Thank you for taking my question, and good afternoon. I'd like to talk about pricing. What do you expect to see in pricing?
Do you expect pricing to continue to go up to account for the inflation which you've already stated in the budget? The second question has to do with segment one. If there is an approval for the income range going from BRL 2,600 to BRL 2,800, what would that change? Would you have even more customers that you believe would be able to acquire a segment one product?
Thank you for asking your question, Rafael. Our average ticket was BRL 240 thousand. The market we operate in São Paulo has a cap of BRL 350 thousand. I mean, the changes in the income range in the program wouldn't make a substantial change for our 2025 products.
Now, when you speak about HIS1, that's a more sensitive program. The income rate is a bit closer than the 240 will bring a substantial update. When you think about people who as a household have 2,840 as the family income, well, that's a lot of people. Even though we don't have that, this at this moment, the demand is very high, and it really meets what our products offer. We're very enthusiastic. Our plan for the year is to continue to acquire land bank for these products. We should have 15%-20% of our launches within the segment one because of project approvals, really. This is really a demand that the Brazilian society has. When you look at the housing breakdown, it is much more focused on lower income.
This is a Plano&Plano operates in with very much efficiency and will continue to operate there.
Thank you, Luna. Have a good weekend.
Thank you.
Elvis Credendio from BTG Pactual will ask the next question.
Good afternoon, everyone. On allowances, and provision for bad debt, I'd like to understand from you what you expect to see till the end of the year if there are customers defaulting, just to try and understand that bit better. My second question has to do with the revenues from the private market. It hasn't grown much of late, right? We have had a PSV that was much higher, but the revenue wasn't that much higher. The effect in this quarter comes from the different cycles because there's a new season, a new period coming up.
Can we expect something like this for the future, or should it get worse or better? Thank you.
This is Anselmo, Elvis. A provision for bad debt, we have had an adjustment in the more recent adjustment. According to historical records of default, we have had a better way to prepare for it. There are about BRL 32 million that are in default at this point. As for revenues, ever since January 2024, we have a cycle that is very favorable for the customer and for the VPL. There's a 36-month cycle instead of the 24-month cycle. With that, we increase the demand for the same product, and we have more time to fit the customer's mortgage, be it with us or another party. We have a higher VSO.
With that, you have a better cash cycle, and you increase the VPL. 2024 was a transition. There was a delay in the start because there was a two-month difference between launch and the start of construction, whereas now it's six months. Now we're in a recurring cycle for launches and for the construction, which is starting six months after the launch. We had BRL 4 billion in launches with a revenue of BRL 2.2 billion. We have a revenue that will get to BRL 4 billion in the near future. The transition was in the year of 2024, and now we expect to have more recurring growth and revenue increase. Thank you, Elvis.
Have a good afternoon. Thank you.
Should you wish to ask a question, just click the button Raise Hand, or you can send your question in writing using the Q&A button. Please bear with us while we collect further questions. Again, should you wish to ask a question, just click the button Raise Hand, or you can use the button that says Q&A at the bottom of the screen. Please bear with us while we collect the next questions. The next question comes from Saulo Santana.
The Selic rate of about 15%, is that a concern for the company?
Hello, Saulo. There could be an impact in the medium term, but Minha Casa, Minha Vida is 80% of our launches, and in that segment is a smaller concern.
The interest rates will have the interest in a table as per their income and as per their FGTS, and that won't have an impact on the customer's ability to acquire. In the middle income, then you have to be more selective with the products. We have 20% of our products in the middle income segment, and we have to pick and choose them very carefully. You have up to 36 months to deliver the projects. We know that the cycles will change, and we know that the middle income market is very important for the São Paulo market. This is basically the influence that we have, the partial influence that we have with Selic rising or expecting to grow.
This is the end of our Q&A session.
We'd now like to turn the floor over to Rodrigo Luna for his final remarks.
Thank you everyone for joining. Thank you for joining our earnings conference call for the fourth quarter of 2024. We restate our commitment to a solid, consistent operation that is also transparent, and we are adamant that our work is a long-term type of work. We're a company that believes in dedicated management of operations. In the past years, Plano&Plano has consistently delivered solid results within what we believe makes sense for our development. We're confident that 2024 will be, again, for every reason that we have put forward here, it's going to be another very successful year with new records for the company. Thank you very much for joining, and I wish you all a great weekend.